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ELLIOTT WAVE ANALYSIS - Latest Market Commentary

Stock Indices

Global stock indices fall into two main categories – those that are decelerating during the advances that began from the Oct.’14 lows and those that are still accelerating. There is a noticeable deceleration for U.S. indices including the S&P, Dow Jones (DJIA), Russell 2000 and Nasdaq 100. This is mainly because medium-term upside targets are being approached already but also because the S&P & Co. are developing from last October into ending contracting-diagonal patterns. In Elliott Wave terms, the diagonal consists of three consecutive ###but marginal higher highs and this is defined within its upper boundary line but also explains why prices are decelerating even though record highs are being recorded. In the other camp, we have the ‘accelerators’ – these indices are traded in Europe, the Eurostoxx 50 and Xetra Dax. Their equivalent October upswings are instead unfolding into five wave expanding-impulse patterns with definable ‘price-expansion’ in the 3rd wave location during February-March but with a 5th wave yet to unfold to the upside. This has much more potential in upside amplitude measurements than the U.S. indices and so we expect outperformance during the next few weeks. Our latest report details upside targets for both U.S. and European indices. Meanwhile in Asia, the Hang Seng has traded higher during the last week to confirm the beginning of its 5th wave upswing but percentage targets are similar to U.S. indices. The Nifty 50 and the ASX 200 have more upside potential therefore align to European indices. Japan’s Nikkei has outperformed during the last few months but is fast approaching upside targets and this means equivalent deceleration during the next few weeks. 27th May 2015

Financial Updates Currencies

Currencies (FX)

Additional upside for the US$ index reinforces the bullish outlook for the next weeks. After completing a 4th wave ‘slanting flat’ sequence at the May low of 93.13, the US$ is poised for upside continuation above its March high of 100.39. The initial upside move from 93.13 to current levels is deemed to have just begun the smaller 3rd within the 5th – any significant pullback would change this into a 1-2-1-2. The most important level to focus on is the 94.82 secondary low – only a break below there would stall upside momentum and forewarn of an adjustment in the counting process. The Euro/US$ is in a similar position – its continuation lower has verified the 1.1468 high as the completion of the ###multi-week ‘slanting flat’ advance from 1.0462. Now, our focus is on original ultimate downside objectives that remain unchanged close to parity and are seen as the idealised area for the completion of several degrees of trend. Meanwhile, US$/Yen continues higher and has now broken above its March high of 122.02. This corroborates ultimate objectives to 126.18+/- to be approached in the weeks ahead. The logic behind this is that the recent low of 118.49 completed a multi-month contracting symmetrical triangle that unfolded as a 4th wave within the upswing from the July ’14 low of 101.06 – the current rally is labelled as the finalising 5th prior to a major reversal. Due to the big upside potential for the US$ dollar, we have aligned our outlook for the AUD/US$. As its decline from the 0.8163 high was not stopped at idealised support at 0.7749-39, there is now an increased risk of additional declines. This goes hand in hand with the US$ dollar’s projected continuation higher – the AUD/US$ is seen to have completed a very complex multi-month expanding flat sequence at the 0.8163 high. Within this flat, there was another expanding flat as a ‘b’ wave – a very intricate pattern. If this analysis proves right, there is downside potential for the AUD/US$ that would pull it below its April high – idealised measurement are shown on our chart with a rare triple fib-price-ratio convergence across different time-frames. 27th May 2015

Financial Updates Bonds

Bonds (Interest Rates)

Federal Reserve Vice Chairman Stanley Fischer is delivering a speech at Tel Aviv University and his commentary apparently states that policy makers will consider global growth as a key factor in determining the timing of interest rate rises in the U.S. They would also consider the continuation of raising rates at a more gradual pace if economic conditions remain benign and would also take into account the interest rate policies of other countries. This seemed to confirm### that the Federal Reserve would make interest rate decisions based on economic statistics – no surprises there! But the big news announced late Wednesday evening were reports that Greece and its creditors had reached a tentative agreement that will provide necessary funding for its economy. Greece was due to pay the IMF 1.6bn € in June and although this is only a tentative agreement, is the first light to shine in the negotiation so far. US10yr yields were little changed following the statement at 2.160% whilst the German DE10yr yield edged slightly higher to 0.547%. Both long-dated yields are currently engaged in counter-trend declines from the May highs with current levels at half-way points in downside progress. But as we look further ahead, trends are defined as ‘upwards’ for the remainder of this year. 27th May 2015

Commodities

Following Monday’s holiday earlier this week, markets reopened with a stronger US$ dollar that transferred through to weaker commodity prices. Gold bullion was marked lower on the opening of Tuesday’s trading following through to Wednesday’s session with prices down to 1183.85. This latest sell-off begins a secondary zig zag sequence within the larger double formation unfolding as declines from last January’s high of 1307.40. This synchronises with a negative correlation of the US$ dollar’s recent gains and we expect further upside for the currency during the next 4-6 weeks. Gold’s equivalent downside targets remain towards### 1096.00-91.16+/- but with interim support at 1143.50+/-. Meanwhile silver’s recent decline from its high at 17.79 begins a 3rd wave sequence within an ending diagonal pattern that began from the January high. Its decline from 17.79 has been modest by comparison to gold but is likely to accelerate during the next several days. Looking further ahead, ultimate downside targets remain towards 13.61+/-. The US$ dollar is also having its effect on Brent oil – price declines from the recent high of 69.63 have isolated the preceding upswing confirming a directional change. We expect continued declines during the next several weeks with acceleration likely during the next few days. Ultimate downside targets remain towards 49.06+/- but the good news is that this represents the final sequence of a corrective decline. 27th May 2015

LATEST ARTICLES

THE ‘INFLATION-POP’ - PRECIOUS METALS SET TO SURGE INTO RECORD HIGHS

Bloomberg hosted a Precious Metals Forum on 23rd May and WaveTrack International was invited to present our latest Elliott Wave price-forecasts. The event was sponsored by the CME Group and Johnson Matthey.

OUTLOOK & FORECASTS FOR 2013

Highlights:

  • The 2013 outlook for global stock indices and commodities remains very bullish and is entering the last stage of the ‘inflation-pop’ phase that originally began from the post-financial crisis lows of 2008/09
  • This is expected to ignite another period of asset buying that increases risk-on multiples by a minimum 45% per cent and in some cases as much as +300% per cent, sending some global stock indices and commodities into record highs
  • Shorter-term, there is a danger of a downward adjustment of -5-8% per cent, but then sharp price advances to resume
  • Commodity related stock indices and equities are expected to outperform as a sector during the next 12-16 months
  • Banking stocks to participate, but most will not exceed their pre-financial crisis highs

As always, this year’s Outlook & Forecasts for the next twelve months are created applying the Elliott Wave Principle for the assessment of pattern and price amplitude, also Cycle Analysis for the timing of the larger trend reversals. Not always do they jive, but they seldom contradict and more often, provide valuable insights into one or two variations of a similar theme within a seemingly unlimited amount of possibilities.

Even though this report outlines the price expectancy of all asset classes for 2012 it will also illustrate how this coming year fits together into the larger picture. The reasoning behind this is to move away from the 'black-box' stereotype and show you why the results relate to their specific outcome. Overall, this report deals with two different time-periods – long-term and inter-mediate term. Long-term refers to the uptrends from the Great Depression of 1932 onwards and inter-mediate term for the coming year and into 2013.

HOW TO INTERPRET EACH ELLIOTT WAVE CHART

What do you see when looking at an Elliott Wave chart? Just lots of numbers & letters overlaying the price data? – or do you see definable patterns that are immediately familiar? And how do you interpret the results of the analysis and put it into an effective trading plan? Read on and test your own knowledge of these subjects and much more...

A COMMODITY SUPER-CYCLE?

Recent reports of a Commodity Super-Cycle grabbed my attention for two reasons – first, this is diametrically different to the outlook I foresee developing during the next decade, and second, this terminology has surfaced at a time when various commodities have already undergone large percentage gains measured from the Feb.'09 lows

THE 'DEFLATIONARY SCENARIO'

The primary theme of this presentation focuses on a 'Deflationary' outlook, forecast as the dominant aspect continuing during the next decade. This is derived from analysing the Elliott Wave pattern structure of the CRB (Cash) Index during its expansionary period of the last 76 years.

THE 'FLASH CRASH'

The Update Alert! messaging service of EW-Forecast Plus responded to the sharp collapse and the following recovery of US stock indices during the volatile trading session on the 6th May.

OUTLOOK FORECASTS FOR 2011

This analysis centres around the S&P 500 that is used as a proxy for other global indices. The great bull market beginning from the 1932 low ends 68 years later in 2000 - other global indices peaked later in 2007 (75yrs) – some still continuing to progress.

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"I just wanted to congratulate you on the EW-Compass reports launch. I'd say all the work you've all put into this project is well worth it… never cease to be amazed by the harmony that you find between the fib relations you highlight and the Elliott count you propose. You are a true descendant of RNE, and I'm quite sure he'd have really loved to see your work… Another aspect that sets you apart is your deep knowledge of the how and why of pattern relationships between higher & lower degrees of the same price action. So much to learn there". - T.S.

ELLIOTT WAVE PATTERN

INTRODUCTION TO THE WAVE PRINCIPLE

The Wave Principle, often referred to as Elliott Wave is a unique methodology that applies Natures Laws, those encompassing the Natural Sciences and Universal Geometric Philosophies to the financial markets. It allows us to view price fluctuations as an organised process that can be non-linearly extrapolated to gain a glimpse into the future direction of trends, counter-trends and amplitudes on any market or contract traded around the world.

Expanding Diagonal Patterns - Do they actually exist? - Elliott's inclusion of the Contracting Diagonal

In R.N.Elliott's original treatise of "The Wave Principle (1938)", he introduces us to diagonal patterns for the first time on page 21. Under the heading, Triangles, Elliott describes the difference between horizontal triangles that represent hesitation within an ongoing, progressive trend and diagonal triangles that form the concluding 5th wave of a larger five wave sequence.

NEWS & EVENTS

Tradersworld Online Expo #12 – Starts 12th November 2012

Peter Goodburn will be presenting his latest Elliott Wave analysis at the 12th Trader Expo held online for 7 weeks starting on 12th November 2012 and ending in the new year on 6th January 2013. Peter’s presentation is entitled “Elliott Wave Price Forecasts & Cycle Projections – Three Phases of the 18 Year Bear Market ~ ‘Shock–Pop–Drop’” for more information visit http://tradersworldonlineexpo.com/

Announcement: 123rd Battery Council & Trade Fair Convention in Miami, 1-4 May 2011

Peter Goodburn will be presenting his latest Elliott Wave analysis at the 123rd Trade Fair Convention of the Battery Council in Miami, 1-4 May 2011. Peter’s presentation is entitled "The Historical Price Trend of Lead and Applying the Elliott Wave Principle to plot its course into the Future".

ELLIOTT WAVE PRICE-FORECAST UPDATES